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Teamsters Accept Contract with ABF

UPDATED--The Teamsters ABF Master Negotiating Committee voted Wednesday that in light of the overwhelming vote against authorizing a strike against ABF Freight, the company's last proposal for the Central Region Local Cartage Agreement would be accepted. As a result, the ABF National Master Freight Agreement is now fully ratified.

The ABF National Master Freight Agreement will be implemented in the next few days. Photo: Evan Lockridge

The National Master portion of the ABF-NMFA and 27 out of 28 area supplements were approved by the affected membership during balloting conducted over the summer and through mid-October. The lone supplement that had not been ratified by the membership was the Central Region Local Cartage Supplement covering nearly 1,900 drivers, dock workers and other local cartage employees throughout the Midwest.

A strike authorization vote was conducted earlier this month among the members covered by the unapproved supplement. The ballots were counted earlier this week and there was a 77% turnout by the affected membership regarding the strike authorization vote. About 70% of those voting declined to authorize a strike at ABF.

In such situations, the Teamsters’ Constitution provides that the Master Negotiating Committee has the authority to accept the company's final offer, according to the union.

"We have now arrived at a point where, simply put, there is nothing left to negotiate with this employer and no desire for a strike in the Central Region based on the vote we received yesterday from the affected membership,” said Gordon Sweeton, national negotiating committee co-chairman. “The responsible course of action is to finalize the agreement."

The agreement will be implemented in the next few days.

It contains a 7% wage reduction that will become effective on Nov. 3. The reduction, however, will be recouped over the life of the agreement with incremental annual wage increases. The agreement also contains provisions to provide for bonuses in the event the company reaches certain national operating performance standards. It also requires the company to continue to participate in the same health, welfare and pension programs and provides for contribution increases in order to maintain benefit levels retroactive to Aug. 1.

“This new labor agreement follows several years of sacrifice from our non-union employees,” said Judy R. McReynolds, Arkansas Best president and CEO, parent to ABF Freight. “As the transportation and logistics market continues to rapidly evolve, we are grateful that our union employees have also recognized the need for ABF Freight to operate much more efficiently so that we can better serve our customers every day.”

It is estimated the new contract will save ABF as much as $65 million annually. For the first six months of the year, parent company Arkansas Best, lost $8.5 million, an increase from the same time in 2012, despite increased revenue. During the period ABF had an operating loss of $17.1 million, compared to the same time in 2012, when its operating loss totaled $14.2 million. ABF isn't set to report third quarter earnings until November.

The new ABF Master Agreement expires on March 31, 2018.

Update adds how much the contract is expected to save ABF and earlier financial results.